A group of junior iron ore miners in Australia's Pilbara region said Monday they appointed engineering company Sinclair Knight Merz to undertake a pre-feasibility study into a 50 million metric ton export port in Port Hedland, and Chinese steel mills are showing interest in the project.

Iron ore companies starting up production are starting to pool their efforts in developing their own infrastructure to get product to resource-hungry China. The cost and availability of ship-loading facilities has always been a hurdle for smaller iron ore miners, but these problems could be overcome as a result of joining forces, the new alliance said.

The Port Hedland project comprises two berths, developed by the North West Iron Ore Alliance, and will be "integral to the evolution of the next tier of iron ore miner," the alliance said in a statement.

The alliance was formed in 2007 and has four members: Atlas Iron Ltd. (AGO.AU) Brockman Resources Ltd. (BRM.AU), BC Iron Ltd. (BCI.AU) and FerrAus Ltd. (FRS.AU), but is open to include new members.

Chinese steel mills, some with existing stakes in Australian iron ore miners, have shown interest in investing in the new port, alliance Chief Executive Justin Walawski told Dow Jones Newswires.

"Chinese steel mills have shown keen interest in building the infrastructure and investment in the port," Walawski said.

Murchison Metals Ltd. (MMX.AU) and partner Mitsubishi Corp. (8085.TO) are developing the US$4 billion Oakajee Port & Rail joint venture to service the emerging midwest iron ore region in Western Australia.

Like the North West Iron Ore Alliance, the venture said it has held discussions with Chinese groups interested in assisting in the development.

Oakajee Port & Rail was awarded the right to build the infrastructure by the state government last year, winning out over rival tenderer Yilgarn Infrastructure, which was backed by China.

It was also announced Monday that former Australian federal Liberal MP Ian Campbell will chair the North West Iron Ore Alliance, with a primary task of negotiating with rail infrastructure providers for access.

The "onus is on the owners of railway lines in the Pilbara to provide third-party haulage on their networks," the alliance said in a statement.

"It is time for the iron ore majors to cooperate with the emerging iron ore producers because it is in the best interests of the state to maximize utilization of the existing rail networks on a fair, transparent and commercial basis," Walawski said.

The debate on access to infrastructure in the Pilbara iron ore region is also set to swing into action again with Rio Tinto Ltd.'s (RTP) appeal against a decision to declare its iron ore rail lines in the Pilbara state open to third-party access due to start on Sept. 28.

Treasurer Wayne Swan last year followed the recommendation of the National Competition Council and declared Rio Tinto's Hamersley and Robe rail networks and BHP Billiton Ltd.'s (BHP) Goldsworthy line open to third parties.

The decision was a major win for iron ore miner Fortescue Metals Group Ltd. (FMG.AU), which has been running a lengthy campaign to gain access to the Pilbara rail lines of the two mining giants.

-By Elisabeth Behrmann, Dow Jones Newswires;

61-2-8272-4689 elisabeth.behrmann@dowjones.com

 
 
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